The power of externalities

The primary outcome of beekeeping is the production of delicious honey. One side effect of beekeeping is that surrounding crops get pollinated which increases the yield for crop farmers. The beekeeper receives no direct income from the healthier, higher value crops but the whole community is better off because of the bees.

In economic terms, this phenomenon is referred to as a positive externality.

We see externalities occur in almost all interconnected systems. In schools, a student’s experience in Lesson 1 with Teacher A can have a huge impact on that student’s approach to Lesson 2 with Teacher B. When Lesson 1 is full of positive emotion, engagement, meaningful connection, achievement and purpose, students walk into Lesson 2 with an optimised psychology and a neurology primed for learning.

There are also negative externalities – such as when pollution emitted by a factory spoils the surrounding environment or when Teacher A allows negativity, disengagement, or disempowerment to fester in Lesson 1. In this case, Lesson 2 feels very, very different for Teacher B and the students.

This is a big part of the reason why wellbeing needs to be placed at the heart of a school or organisation for it to really transform a culture. The more of the community that embrace and ‘live’ wellbeing, the more likely we are to experience the dynamic upward spiral of wellbeing that positive externalities can power.

Published by

David Bott

Hi, I'm David Bott, Associate Director of the Institute of Positive Education in Australia.

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